Most people have heard the statistic that about half of marriages ending in divorce. The majority of people who get divorced wind up getting remarried, and most of them have children. This creates some questions with regard to estate planning.
If you’re getting married for a second or third time, after having children, you may be in possession of some considerable financial resources. You have to think long and hard about how to proceed to make sure that your children receive the inheritances that you have in mind for them.
Parenthetically, we would like to add the fact that the majority of second and third marriages end in divorce. As a result you may want to consider your own financial future as well as that of your children, but we will cover that at a different time.
Assuming your marriage was to last until you pass away, you would logically want to provide for your surviving spouse. But at the same time, you may be concerned about relying on your spouse to provide appropriately for your children.
There are estate planning solutions for people who are in this situation, and one of them is a qualified terminable interest property trust.
Another device that is sometimes utilized is a life estate. With this approach you name a life tenant. It could be your spouse. He or she retains ownership of the home throughout the rest of his or her life.
However, you also name what are called “remaindermen.” You name your children to assume this role, and they automatically become owners of the property after the death of the life tenant.
Author, President and Founding Attorney
Parman & Easterday